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Maintenance

Effective January 1, 2015, a new maintenance statute went into effect in Illinois.

There is no entitlement to spousal support in the State of Illinois. A Court makes that determination on a case by case basis. In the past, if there was a decision that support was appropriate, each judge made an independent determination as to the duration and amount of support a party was to receive. That has now changed in cases where the joint yearly gross income of the parties is $250,000 or less.

If the joint yearly gross income is $250,000 or less, the new statute imposes two (2) formulas—the first to compute the amount of support and the second to compute the duration of the support. Again, this is only applicable where the joint yearly gross income is $250,000 or less.

The formula for the amount: the amount of maintenance is calculated by taking 30% of the payor’s gross income, minus 20% of the payee’s gross income. That is the amount of maintenance that will be paid. The statute states that the amount calculated as maintenance, when added to the gross income of the payee, cannot result in the payee’s receiving an amount in excess of 40% of the combined gross income of the parties.

By way of example: one spouse earns a gross income of $130,000; and the other spouse, $30,000. Thirty percent (30%) of $130,000 equals $39,000. Twenty percent (20%) of $30,000 equals $6000. $39,000 minus $6,000 is $32,000. The total gross income to the payee would be $62,000. Forty percent (40%) of the total gross income of the parties is $160,000. Forty percent (40%) of that equals $64,000. Therefore, the total amount to the payee ($62,000) does not exceed 40% of the combined gross ($64,000). It should also be noted that the amount paid by the payor as maintenance is tax deductible, and taxable to the payee. Therefore, the payor is paying less than 100% on the dollar.

As to the determination of the length of the maintenance, the calculation is made by multiplying the length of the marriage by a percentage: 0-5 years ( .20); 5-10 years ( .40); 10-15 years (.60); 15~20 years (.80); and for marriages of 20 or more years, the court has the discretion of ordering either permanent maintenance or maintenance for a period equal to the length of the marriage. By way of example, for a 15 year marriage, the duration would be 12 years.

For the purposes of the statute, gross income in defined as income from all sources. It should also be noted that, in Illinois, there is no entitlement to maintenance. The determination is made on a case by case basis.

It should be noted that the prior maintenance statute had, and the new maintenance statute continues to have, a provision for a deviation up or down when the circumstances warrant it. For example, a serious illness, other extraordinary medical problems, and/or large medical bills might be a reason for a deviation.

The new maintenance statute refers to the above two formulas as “guidelines”. The child support statute, which also refers to “guidelines, has been in effect since January 1, 2015. In practice, a court is more likely than not, to apply the “guidelines” to determine the amount of child support. Since the new maintenance statute has only been in effect for a very short period of time, it is not yet known how or when the “guidelines” will be used. There is also the possibility that judges will apply the guidelines differently, especially when child support is in the mix.

Maintenance is 100% tax deductible by the payor and 100% taxable to the payee as income. Child support, on the other hand. is not deductible by the payor and the payee pays no income taxes on the amount. In the past, a Court was able to award “unallocated maintenance and child support” (in effect, combining both maintenance and child support under the title of tax deductible maintenance), if there was a tax benefit to the parties. If the payee was in a lower tax bracket, there may have been a benefit to both parties of having the total amount fall under the umbrella of maintenance. Under the new statute, a Court no longer has the authority to make an “unallocated” award unless the parties agree to it.